The deal with Religious Zionism will see the faction receiving the finance ministry in a rotation agreement, as well as the immigration ministry and a “national missions” portfolio.
The pro-settlement faction will also have a ministerial-level post under the defense ministry “in charge of settlement” in the occupied West Bank, governed by military rule since Israel occupied it in 1967.
An estimated 475,000 Jewish settlers now live in the West Bank in communities considered illegal under international law, alongside some 2.9 million Palestinians.
Religious Zionism leader Bezalel Smotrich called the coalition deal “a historic step” towards a government that would “regulate and develop the settlement enterprise”.
Netanyahu added in the joint statement that it was a “significant step towards a national right-wing government that would care for all Israelis”.
Earlier on Thursday, he issued a statement after Noam’s Avi Maoz, a staunch opponent of LGBTQ rights, said he would “make sure to cancel” Jerusalem Pride.
“The Jerusalem Pride march will continue marching,” Netanyahu said.
LGBTQ rights groups and activists expressed concern Monday after Netanyahu signed the deal with Maoz granting him a cabinet post.
The premier-designate has until December 11 to form a government, with a possible extension of 14 days.